EZcash is unusual in that it was developed by one company, but three out of five mobile operators use it. This may be unique. Why can we not see more of these kinds of collaborations? Report and link.
I write this sitting at a UN ESCAP consultation on the Asia Pacific Information Superhighway in Paro, Bhutan. Bhutan is a country of around 800,000 people which has two fiber cables connecting the main cities to the Indian cables in the Siliguri area. Actual broadband user experience is patchy. Because there was no official representative from Sri Lanka, I was asked to stand in. My presentation is here.
LIRNEasia has always been vocal on Mobile Payment/Mobile money. Under the research theme Mobile 2.0 we looked at both horizontal (Telco and regulations) and vertical (m-payments) aspects of mobile money. In 2009 facilitated by LINREasia, LIRNEasia‘s then Senior Policy Fellow Muhammad Aslam Hayat, wrote on the possibilities of having mobile money in Sri Lanka. Dialog, after many years of negotiations with the regulators, implemented ez Cash in June 2012.
Dialog Axiata, Sri Lanka’s leading mobile operator launched mobile money payment system yesterday with the consent of central bank, Sri Lanka. Back in 2009 LIRNEasia‘s Senior Policy Fellow Muhammad Aslam Hayat wrote about the possibility of having mobile money in Sri Lanka and LIRNEasia facilitated it. Dialog is the first operator to be licensed by Sri Lanka’s central bank to make mobile payments. “The dawn of the mobile money era in Sri Lanka has been made possible by the progressive, and financial inclusion focused, regulatory ethos of the Central Bank of Sri Lanka,” Wijayasuriya said. “In this respect Sri Lanka’s payments and settlement legislation and Mobile Payment regulations stand among the most progressive in the world.
Given coincidence of the SAARC Minister’s meeting and the release of LIRNEasia’s twice-a-year price benchmarks, I was tempted to see how much progress had been achieved, with regard to the Colombo Declaration’s para 6 which called for low intra-SAARC international voice tariffs. Not much progress to report, unfortunately. On the fixed side, the only countries with intra-SAARC tariffs lower than to non-SAARC countries, are Bhutan and Nepal. Bhutan, because it has a special price for India (other SAARC prices are high) and Nepal because it has not changed its extremely high tariff structure (and the lower-by-comparison intra-SAARC prices). Lanka Bell in Sri Lanka offers low prices to India, but our methodology does not capture that, because we take the prices of the largest operator, SLT.
Today, Lanka Bell (the cable partner of Reliance through Flag), announced that calls to India would henceforth cost LKR 0.07 a minute, among the lowest IDD rates offered. They have not got around to updating their website, but newspaper ads should count for something. What is causing downward pressure on international call rates to India? Just a short time back, Dialog cut prices to India.
“Sri Lanka’s leading mobile operator is creating a broadband revolution. By leveraging HSPA mobile broadband technology, it is bringing affordable access to all levels of society, from the wealthiest businesses to the poorest villages.” Thus starts the GSMA case study on the Dialog mobile broadband. It is just four pages and in easily readable format – but still enough new stuff, that makes it a worthy read. Selected extracts: Dialog estimates that the rural economy generates $350 million per month compared to $110 million in the urban economy.
Meeting the traget of a billion dollars of FDI in 2008 seems to rest on foreign investment continuing at a high rate in telecom. After all, in the first half of the year, telecom brought in USD 291 million, out of a total of USD 425. However, the increasing hostility to the sector driven by the JHU plus the decline in people’s buying power pulled down profits last quarter. The largest mobile operator, Dialog, stated that its capital expenditures for the coming year will be cut by about 25 percent at an investment briefing recently. One cannot draw conclusions from one quarter, but do not be surprised if the first half of 2008 turns out to be the high point of investment in the sector.
Hutch, a pure BOP play that was making very good profits, has reported declining profits and revenue growth. One quarter does not a trend make. But seen together with Dialog’s bad results for the last quarter, it suggests things are not looking good for the telecom sector which is taking multiple hits with tripled spectrum charges, revenue-raising taxes in the name of the environment and all sorts of additional costs imposed in the name of national security. If the government keeps taking JHU advice, they are likely to make the economy slow to a crawl.
When he built Parakrama Samudraya a millennium ago, King Parakramabahu the great did not have to depend on the Internet. How lucky! Had it been so, he would have achieved few great feats. The pitiable Broadband services at Polonnaruva looked as if we have not made any advances since the days of the Great King. Both SLT and Dialog boast about their island wide networks.